Personalization at Scale: How to Hook Your Customers & Boost Customer Lifetime Value

Amid all ecommerce conferences taking place this spring, there are two concepts that were discussed with particular passion – composable commerce and personalization.?

Composable certainly deserves a separate discussion, so this month's newsletter I’ll dedicate to tailoring shopping experiences to each customer across multiple touchpoints. That is, personalization at scale.

Personalized digital experiences are no longer a nice add-on to customer experience (CX). Consumers expect personalization, and 76% get frustrated when they don’t find it. At the same time, businesses that meet that demand generate, on average, 40% more revenue from personalization.

While the need to match customers’ expectations with experiences tailored to them is obvious now, doing it right and at scale is easier said than done.

You may struggle with delivering a smooth CX across multiple channels. Or, your personalization-at-scale efforts may come across as creepy. Or, you might have already implemented personalized content and product offerings but see no tangible results.

None of this will work unless you drive personalization at scale, adding personality to your online and offline activities across all consumer touchpoints. Here I’ll show you what personalization at scale is, how it can benefit you, how to adopt it, and more.

Personalization vs Personalization at scale: Big difference?

Think about your experience as a customer at a physical apparel store. A sales rep can help you find the right outfit for, let’s say, a wedding ceremony. They will certainly tailor their offers depending on your tastes, favorite colors, season, etc. This attention and care add value to your experience and make you feel valued, too.

Personalization in ecommerce is meant to replicate this experience online: on your website, app, marketplace, and any other touchpoint.

Meanwhile, personalization at scale means using technology to analyze vast pools of customer data in real time to deliver highly relevant CX that corresponds to their needs and wants across all touchpoints.

Personalization at scale is characterized by the following:

• Unifying customer data from multiple sources in real time
• Adopting an omnichannel strategy for personalization
• Microsegmenting your customers
• Predicting behavior and personalizing interactions based on intent
• Adapting CX based on interactions and signals in real time

To introduce personalization at scale, you’ll need to collect and process mountains of user data. If that data is trapped in silos or fragmented across multiple sources, you won’t be able to draw the insights you need to get it right.

How do you start to successfully personalize CX at scale

The recipe to a successful scaled personalization campaign lies in two ingredients: unified data backed by technology and organizational alignment.

Your personalization strategy should first of all meet your business objectives and specific customer expectations, which will foster great CX and improve your bottom line.

Also, remember that data is crucial to any kind of personalization. But unified data pulled with the help of tech available nowadays is the key to implementing a scaled personalization strategy.?

So here are a few things to consider before preparing and executing a solid strategy that bears fruit:

• Define the roles: Assign a person responsible for overseeing the customer lifecycle and strategies for a positive CX. This might be a chief CX officer in enterprise-level organizations or the head of ecommerce for small and mid-sized businesses. This is how you will track the success metrics for your campaigns.
• Think like your customer: Visualize your customer journeys on a map keeping in mind their brand awareness stage and touchpoint. It’ll inform your personalization decisions based on your customers’ pain points at every step of their way.
• Unify customer data: Ensure customer data isn’t trapped in separate systems, like CRMs, ecommerce website, mobile apps, POS, etc. Invest in a reliable customer data platform (CDP) to enable seamless data exchange and syncing across all touchpoints.?
• Leverage advanced analytics: You don’t have to make sense of mountains of data all alone. AI-driven advanced analytics will pinpoint patterns and draw insights from data to predict user intent and determine a course of action.
• Create a fully integrated tech ecosystem: By definition, personalization at scale requires all teams across the organization to coordinate on CX. To power this coordination, you’ll need an orchestration layer (APIs, microservices, modules – call it whatever you please) that exposes context-sensitive personalized data to an app which, in return, will drive personalization efforts on that particular device.?

At this point, you might need to rethink your software architecture and overhaul it if needed to support personalization at scale. To this end, you may replatform to a composable or headless ecommerce architecture. But I will save this story for another time.

The alluring promise of digital personalization at scale: 5 benefits you can unlock

You may hesitate about implementing a personalization-at-scale strategy since your ecommerce business already generates sales. Let’s break down the five reasons you should go through with it anyway, even if your operations seem fine as-is.

Meeting customers’ expectations

When it comes to personalization at scale, Adobe states that 87% of senior executives believe that customer expectations have become “digitally rewired.” McKinsey research backs it up: 71% of consumers expect personalization from brands, and 76% get frustrated when it’s not there.

When it comes to particular expectations, the top five are:

• Facilitating navigation
• Suggesting relevant products and services
• Adapting messages to consumers’ needs
• Providing targeted promotions and special offers
• Celebrating consumers’ milestones

Meeting these expectations implies some major rewards for businesses. Over three-quarters of consumers are more likely to purchase from you and recommend your brand if you personalize their CX.?

Growing your ROI

Mass personalization at scale, when done right, increases your revenue. For example, 451 Research puts the revenue boost from personalized cross-selling and recommendations at $5.6 billion. Adobe personalization at scale statistics, in turn, put the YoY revenue growth at 1.7x.

As for the ROI in particular, one study found that in 26% of cases, every dollar spent on personalization had a return of three to five dollars. At the same time, 9% of respondents stated that their ROI was 20 or more dollars on every dollar spent.

Increasing customer retention

Reducing your costs is just one side of the equation. A solid personalization at scale strategy also helps you retain your customers. And as you may know well, customer retention is 5x times more cost-efficient than acquiring a new one.

For instance, McKinsey found that 78% of consumers are likely to make a repeat purchase following a personalized shopping experience. And as of 2022, 62% of consumers say they will abandon a brand after an impersonalized experience, showing a 17% increase since 2021.

Increasing AOV & CLV

Improved customer retention and satisfaction are great recipes for increasing both average order value and customer lifetime value. For example, Adobe puts the customer lifetime value YoY uplift at 2.3x for brands that introduced personalization in customer experience.

McKinsey found that companies excelling at personalization have a two times larger share of customers that spend more year on year (36% vs 18%). They also get more out of loyalty (53% of their sales are linked to a loyalty ID).

Building trust

Accurate, meaningful personalization makes customers feel valued. This is how you show that you care about them individually and are willing to go that extra mile to deliver an excellent shopping experience.

Customer trust translates into a boost in metrics like conversion and customer retention rates, customer lifetime value, revenue, customer loyalty, and more.

A detailed customer journey mapping will help you pinpoint the ways to personalize the CX that your customers desire. That’s what we did for one of our clients, a Saudi Coffee Roaster. After a thorough mapping and customer behavior analysis, the company added new features like wholesale, digital-only products (like coffee workshops), and gamification. That, in turn, boosted customer loyalty.

This is just a brief abridgment of my article published on Elogic Commerce blog. Follow the link to check it out for more figures, charts, and examples: https://elogic.co/blog/personalization-at-scale-definition-benefits-examples/?

Also, let me know what you think in the comment section below. Do you think personalization at scale is challenging to undertake?